Significant Transactions

12 Months Ended

Dec. 31, 2022

Note 3 — Significant Transactions

Apartment Community Acquisitions

During the year ended December 31, 2022, we acquired three apartment communities in South Florida and one in the Washington, D.C. area. Summarized information regarding these acquisitions is set forth in the table below (dollars in thousands):


Number of apartment communities		4
Number of apartment homes		1,351

Purchase price	$	640,067
Capitalized transaction costs		7,325
Total consideration	$	647,392
Land	$	54,825
Building and improvements		576,779
Right-of-use lease asset		80,651
Intangible assets (1)		17,203
Lease liability		(80,651	)
Below-market lease liabilities (1)		(613	)
Real estate tax liability assumed		(802	)
Total consideration	$	647,392

(1)

Intangible assets and below-market lease liabilities have a weighted-average term of 2.2 years and 1.4 years, respectively.

Subsequent to the year ended December 31, 2022, we acquired Southgate Towers, a 495 apartment home community located in the South Beach neighborhood of Miami Beach. Total consideration of $298.0 million includes $101.2 million of debt assumed and the issuance of $22.4 million in common OP Units.

Apartment Community Dispositions

Sold apartment communities during the years ended December 31, 2022, 2021, and 2020, are summarized below (dollars in thousands):


	2022		2021		2020
Number of apartment communities sold		18		16		2
Number of apartment homes sold		3,364		1,395		485
Gain on apartment community sales	$	939,806	$	243,369	$	119,215

The apartment communities sold were predominantly located outside of primary markets or in lower-rated locations within primary markets and had average revenues per apartment home significantly below those of our retained portfolio. The apartment communities sold during 2020 were sold by Aimco prior to the Separation.

From time to time we may be marketing for sale certain communities that are inconsistent with our long-term investment strategy. At the end of each reporting period we evaluate whether such communities meet the criteria to be classified as held for sale. As of December 31, 2022, no communities were classified as held for sale.

Lease Cancellation

During 2021, we leased certain properties to Aimco for the purpose of their development, which were accounted for as sales-type leases. In accordance with ASC 842, we recorded a net investment in the leases, equal to the sum of the lease receivable and residual asset, discounted at the rate implicit to the leases. During the years ended December 31, 2022 and 2021, we recognized income of $17.3 million and $26.0 million, respectively, related to these sales-type leases, which is reflected in interest income in our consolidated statements of operations.

On September 1, 2022, we canceled the existing master leases and accordingly, we will not receive any lease payments associated with these sales-type leases going forward. As a result of the cancellation, we now again own these properties. AIR paid $200 million to Aimco for the improvements added during the development period in accordance with the lease agreement.

AIR held a $466 million leased real estate asset on the consolidated balance sheet as of August 31, 2022. The total consideration of the added improvement value payment, leased real estate asset, and related costs were allocated to the underlying assets returned to AIR based on the following allocation (dollars in thousands):


Number of apartment communities		4
Number of apartment homes		865

Land	$	133,471
Building and improvements		520,448
Intangible assets (1)		13,470
Below-market lease liabilities (1)		(866	)
Total consideration (2)	$	666,523

(1)

Intangible assets and below-market lease liabilities have a weighted-average term of less than a year.

(2)

Includes the leased real estate asset as of the cancellation date and the added improvement value payment.